Consumer vs M2M – What’s an operator’s best bet in IoT? Part 1 of 6

What is the eSIM and how will it impact the telecoms industry?

The eSIM is the latest in the evolution of the SIM and has proven to be a hot topic in the industry. It is an embedded SIM chip that is soldered directly into a device and cannot be removed like traditional SIM cards, which allows devices to be fully waterproof. It is much smaller, considerably more durable and allows for greater memory capacity whilst retaining the same level of security. As a result, it effectively solves many of the problems device manufacturers (OEMs) currently face concerning size, weight, and use. The smaller size of the eSIM supports the growing trend towards miniaturisation by saving a handsome 90% or more of device space previously allocated for SIM cards.

Moreover, this SIM technology is far tougher and can withstand demanding environmental conditions such as shock, heavy vibrations, extreme temperatures, moisture exposure and corrosion. This gives the eSIM a substantially longer lifespan over the standard removable SIM.

All these factors and its mobile connectivity mean that the eSIM is expected to be added to a wide range of devices from mobile phones, smart vehicles, smart meters and wearable technology. The benefits to the device manufacturer and the end-consumer are just too great to ignore.

So how does the eSIM help the mobile network operator?

Well for starters, it is likely to lead to wholesale reductions in opex as operators will no longer be involved in the handling of SIM cards – or at least not those embedded in new devices. The procurement cycle of the SIM will become the responsibility of the device manufacturer. This liberates the operator from the massive time, effort, and costs associated with buying, provisioning, and distributing of SIM cards. Secondly, and perhaps most importantly, the eSIM will enable an explosion of connected devices that will provide operators with the opportunity to manage a large number of connections.

Will the traditional SIM card just disappear?

McKinsey & Company has reported that the traditional SIM card will still dominate the market for the next 5 years at least. The reasons for this are twofold: firstly, legacy technology is unable to be physically adjusted for an eSIM and, secondly, design changes are required in new devices to accommodate the eSIM, along with the R&D and market testing that goes with it. Because of this, the GSMA only expects to see a substantial revenue growth for the embedded SIM from 2022 onwards as it is introduced into new devices on the market.
In the interim, the gap between legacy technology and the eSIM can be filled by loading the traditional SIM card with eUICC software, meaning that legacy technology can be retrofitted with the remote provisioning capabilities of the eUICC.

For more information on our full eSIM range, get in touch with us using the form below.